Four Things Taxi Companies in Singapore Need to Change To Keep Their Drivers

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I haven’t taken a taxi in Singapore for over two years. Whenever I need to get somewhere after midnight, it’s almost always cheaper to use Uber or GrabCar… or UberPool or GrabShare if I want to lower the price even further.

And many Singaporeans feel the same way. It’s a relief not to have to get stuck in some interminable taxi queue, or to desperately try to flag down a taxi with a driver who actually deigns to take you to your destination.

Given that many of my friends have now switched exclusively to Uber and no longer take taxis, it’s no wonder taxi drivers are leaving the trade. The number of unhired taxis has risen to 5.9%, when it was 4.2% in 2015. The total number of taxis also shrank from 2016 to 2015, indicating that the number of taxi drivers dropping out is higher than the figures might suggest.

This is bad news for taxi companies, obviously, as their revenue comes from the rental fees drivers pay.

If taxi drivers continue leaving, the taxi companies will need to be more competitive by making it more profitable for their drivers to continue driving. Here are four ways they should change.

 

Taxi rental

Ever wondered why taxi drivers all seem to work six or seven days a week? Well, that’s because renting the most basic taxi used to set many of them back over $100 a day.

It’s only recently that some taxi companies started slashing their rents to attract cabbies.

Transcab has already slashed their taxi rental fee of their basic Toyota Wish to $59.50.

Meanwhile, Comfort and SMRT Taxis are still charging over $100 a day, but they risk having their drivers jump ship to another taxi company if they don’t adjust their prices soon. Car rentals for Uber from companies like Lion City Rentals are way lower than $100 so it’s no surprise as to why taxi drivers are leaving.

 

Booking fee

Ever since private car hire services like Uber appeared on the scene, Singaporeans have gotten into the habit of just picking up their smartphones and using an app to book their rides home, which is so much more pleasant than having to stand by the side of the road flailing your arms like a chicken.

Taxis can also be booked using apps like GrabTaxi, but what deters people is the booking fee.

It now costs $3.30 during peak hours and $2.30 at all other times to book a taxi. The booking fee, together with a whole host of other surcharges that people are never sure of, makes passenger more eager to switch to Uber, especially when you can see the fare upfront.

 

Location surcharge

There is no real reason to have a location surcharge in places like Changi Airport and Resorts World. Singapore is tiny, so it’s not like taxi drivers are driving out to some god-forsaken island when they pick you up at Marina Bay Sands or Singapore Expo. Ok, you might disagree about the Expo bit you get what I mean.

So why the hell are we charged a location surcharge to be picked at from these places?

Let’s get real, even without the location surcharge, taxi drivers would still flock to Changi Airport to pick up passengers, precisely because these are places where people often have no choice but to take a cab because public transport is an inconvenient choice.

Before, people had to pay the location surcharge simply because they didn’t have a choice. Now they do, thanks to Uber and GrabCar.

 

Midnight surcharge

It’s 12 midnight and you need to get home. None of the cabbies in your area are going your way. You have two options: call an Uber or GrabCar, or call a taxi.

Unless you’re still using a dumbphone, the answer is a no-brainer—you use Uber and GrabCar because they’re cheaper as you won’t incur midnight surcharge.

Taxis charge a whopping 50% midnight surcharge from 12am to 5:59am, which is exactly the time when many people need to take a cab or car hire because the trains and buses have stopped. Because of this surcharge, it’s almost always cheaper to use Uber after midnight.

This has got to change if taxi companies hope to deter people from turning to private car hire services once the clock strikes 12.

The last time I took UberPool home from Changi Airport, the journey of 30km cost me only $23 (about $2 lower than UberX). Had I taken a taxi, I would have paid a $5 location fee, $3.60 flagdown fee, a $21 metered fare (according to gothere.sg’s estimate) + 50% midnight surcharge, which would have added up to $44.40. The choice to take an Uber was a no brainer.

In the past, all these extra fees and charges were tacked on to benefit drivers and boost their earnings, but now it’s working against them because more and more passengers are turning to private car hire apps instead.

On the other hand, the taxi companies suffer no direct loss for now—until taxi drivers start becoming extinct.

In order to ensure the longevity of the taxi industry, taxi companies need to find ways to encourage passengers to book taxis instead of turning to Uber, while still making taxi driving profitable for drivers.

Do you usually take taxis or Uber/GrabCar? Tell us in the comments!

In my previous life, I was a property lawyer who spent most of my time struggling to get out of bed or stuck in peak hour traffic. These days, as a freelance commercial writer, I work in bed, on the beach, in parks and at cafes, all while being really frugal. I like helping other people save money so they can stop living lives they don't like.

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